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Reverse Confusion Suit Not Ironclad, but SmartSync Lives On

In a split decision, the US Court of Appeals for the Ninth Circuit vacated a district court’s summary judgment and remanded the case for trial in an action brought under the Lanham Act in order to resolve material issues of fact on likelihood of confusion/reverse confusion factors that remain in dispute. Ironhawk Technologies, Inc. v. Dropbox, Inc., Case No. 19-56347 (9th Cir. Apr. 20, 2021) (Smith, J.) (Tashima, J., dissenting)

Ironhawk developed computer software designed to transfer data efficiently in “bandwidth-challenged environments” and has marketed the software since 2004 using the name “SmartSync.” Ironhawk registered the SmartSync mark in 2007. In 2017, Dropbox launched a feature entitled “Smart Sync,” which allowed users to see and access files in their Dropbox cloud storage accounts without taking up space on their hard drive. Ironhawk sued Dropbox for trademark infringement and unfair competition in 2018, alleging that that Smart Sync intentionally infringed upon Ironhawk’s SmartSync trademark and was likely to cause confusion among consumers. The district court granted summary judgment in favor of Dropbox, concluding that “a reasonable trier of fact could not conclude that Dropbox’s use of Smart Sync is likely to cause consumer confusion.”

Ironhawk appealed, focusing primarily on its reverse confusion theory of infringement. Reverse confusion occurs where consumers dealing with the holder of the senior mark (Ironhawk) believe they are dealing with the junior (Dropbox). This occurs when someone who is only aware of the well-known junior (Dropbox) comes into contact with the lesser-known senior (Ironhawk) and incorrectly believes the senior is the same as, or affiliated with, the junior user because of the similarity of the two marks.

The Ninth Circuit first defined the relevant consumer market. This issue revolved around whether the relevant market should be limited to Ironhawk’s only active customer, the US Navy, or whether it should include commercial customers. Dropbox argued that the market should be limited to the Navy and that consequently the relevant consumer would be less likely to be confused as to the source or affiliation of SmartSync. In terms of procurement, it was undisputed that the Navy exercised significant care and effort. However, Ironhawk argued that it previously had a commercial customer, and that it actively markets and pursues business with other commercial businesses. The Court held that because Ironhawk had a previous commercial customer and had made recent attempts to acquire more commercial accounts, a reasonable jury could include the potential commercial customers in the relevant market.

The Ninth Circuit next turned to the “highly factual inquiry” of the eight Sleekcraft factors:

  • Strength of the mark
  • Proximity of the goods
  • Similarity of the marks
  • Evidence of actual confusion
  • Marketing channels used
  • Type of goods and likely level of care exercised by purchaser
  • Defendant’s intent in selecting the mark
  • Likelihood of expansion of the product lines.

For the first three factors, the Ninth Circuit found that a reasonable jury could find that:

  • Dropbox’s mark was commercially strong and would be able to swamp Ironhawk’s reputation.
  • The Smart [...]

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Ninth Circuit Shows Led Zeppelin a Whole Lotta Love in ‘Stairway’ Copyright Win

Ruling en banc, the US Court of Appeals for the Ninth Circuit reinstated a 2016 jury verdict, finding that the rock band Led Zeppelin and the opening notes of its hit song “Stairway to Heaven” did not infringe the 1967 song “Taurus” by the band Spirit. Michael Skidmore v. Led Zeppelin et al., Case No. 16-56057 (9th Cir., March 9, 2020) (en banc) (McKeown, J.) (Bea and Ikuta, JJ., dissenting).

The en banc decision addressed a “litany of copyright issues”—the most critical being the interplay between the 1909 and 1976 Copyright Acts and the Court’s reversal of its own precedent in rejecting a doctrine occasionally referred to as the “inverse ratio rule”—when it concluded that, regardless of a copyrighted work’s fame, all plaintiffs must satisfy the same standard of proof in showing that an allegedly infringing work is substantially similar to the copyrighted work.

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Copycat Fight: Office Depot Isn’t ‘Licensee’ of Materials Copied for Customers

The US Court of Appeals for the Ninth Circuit affirmed a district court dismissal of a lawsuit brought by a nonprofit licensor of copyrighted math materials against a commercial duplicating company that copied the materials for licensee school districts for a fee. Great Minds v. Office Depot, Inc., Case. No. 18-55331 (9th Cir. Dec. 27, 2019) (Farris, J).

Great Minds publishes a copyrighted math curriculum called Eureka Math, which it licenses royalty-free to schools and school districts for “noncommercial” uses. The licensees are permitted to make copies of the materials for their own use. Great Minds reserves the right to collect royalties when the materials are used for “other than noncommercial” purposes.

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